Your Safe Money Show Best use of safe deposit box 5 28 22

Memorial Day

 Everyone at Sjoberg & Holmstrom Financial Services and Your Safe Money Show wish you a safe Memorial Day weekend. Our office will be closed on Monday May 30th. You can leave a message by calling 320-679-5183.

May 28th Your Safe Money Show highlights

 Here's what's on the docket for our May 28th edition of Your Safe Money Show. Todd will explain, as college enrollment has dropped, there's a push to celebrate students going into skilled trades. Also he'll examine the best things to keep in a safe deposit box and what you might regret having in your safe deposit box. Listen at 8 a.m. at Nice 95.5FM KBEK. They stream live at kbek.com. Hear recent shows at the podcast page at yoursafemoneyshow.com.

Bear vrs. Bull markets

 “Bear market” is a term used by investors to describe a steep and sustained market downturn. Technically, it’s a drop of 20% or more from recent highs. The tech-heavy Nasdaq Composite stock index is already in a bear market. Investors commonly apply the phrase to a broad stock index like the S&P 500 or Dow Jones Industrial Average, but it also works for individual stocks.

By comparison, a “bull market” is a period when stocks are surging, which has largely been the case since the Great Recession. The last bear market occurred in February and March 2020, when the S&P 500 slid 34%. However, stocks rebounded by mid-August.

Roth conversions

 On the May 21st Your Safe Money Show we talked about converting to a Roth IRA. Here's a snippet from that show: When you trigger a Roth conversion, you’ll be responsible for paying the tax due on any pre-tax contributions or earnings within the traditional IRA. The benefit here is that if the market has dropped, it’s likely that your IRA value has dropped along with it – so your full value has gone down, and you’ll be paying taxes on the current value (which is lower, due to the market being down). So, in theory, you can convert a larger portion of your IRA in a down market and pay less in taxes than you could in years when the market is up.

To hear the more about Roth conversions go to yoursafemoneyshow.com at the podcast page.

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May 21st Your Safe Money Show highlights

 Here's what's on the agenda for the May 21st edition of Your Safe Money Show. Todd will have a guide to the FIRE movement. He'll also have information on whether you should consider a Roth conversion while the markets are down. And there are certain assets that are more difficult than others are when inherited. Todd will explain. Listen at 8 a.m. on Saturdays at Nice 95.5FM KBEK. They stream live at kbek.com. Hear recent shows at the podcast page at yoursafemoneyshow.com.

New generation retirement

 

Social Security COLA

 Social Security beneficiaries could see another record cost-of-living adjustment in 2023, based on the latest government data showing persistent high inflation. A popular inflation measure, the Consumer Price Index for All Urban Consumers, known as the CPI-U, was up 8.3% over the past 12 months, staying near 40-year highs, according to April data released recently. Meanwhile, the index the Social Security Administration uses to calculate cost-of-living adjustments each year, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, increased by 8.9% over the last 12 months.

To be sure, a bigger cost-of-living adjustment for 2023 is not guaranteed.

To calculate the COLA each year, the Social Security Administration compares CPI-W data from the third quarter to the third quarter of the prior year.

If inflation subsides, there is the possibility of a lower adjustment, or even no increase, for next year or in 2024.

Time will tell if beneficiaries will get a COLA, but if there is no adjustment, Medicare cannot raise their rates either.

If you have questions go to yoursafemoneyshow.com.

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Highlights for May 14th Your Safe Money Show

 You can hear information about non-financial assets and estate planning. The challenges of grandparents raising grandchildren and the difficulties of Grey Divorce. All these topics will be covered on this week's (May 14th) edition of Your Safe Money Show. Listen at 8 a.m. at Nice 95.5 FM KBEK. They stream live at kbek.com. Hear recent shows at the podcast page at yoursafemoneyshow.com.

Affordable Connectivity Program

 It just got easier for millions of Americans to receive free, high-speed internet at home. The White House announced Monday it has reached agreements with 20 internet service providers across the U.S. — including the telecom giants AT&T, Comcast and Verizon — to offer broadband plans that would be completely free for eligible low-income Americans. The newly available internet plans are part of the Affordable Connectivity Program (ACP). Under the ACP, the federal government provides a monthly internet subsidy of up to $30 to households that earn 200% or less of the federal poverty line or receive one of several government benefits programs, including the Pell Grant, Medicaid, Supplemental Security Income (SSI) and SNAP aka food stamps. To receive the benefit, low-income Americans must first apply online, by phone or by mail. https://www.affordableconnectivity.gov/how-to-apply/

Compound interest

 Compound interest is distinct from simple interest in that interest is earned both on the original investment (the principal) and the interest accumulated so far, rather than simply on the principal. Because of this, accounts with compound interest grow faster than those with simple interest. For example, if your interest compounds annually, that means that you’ll gain more interest in the second year after your investment than you did in the first year. Additionally, the value will grow even faster if the interest is compounded multiple times per year. Compound interest is offered on a variety of investment products and also charged on certain types of loans, like credit card debt. Interest on your interest is a wonderful thing. To learn how to utilize this strategy with your retirement plan call 320-679-5183 or go to yoursafemoneyshow.com.

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Your Safe Money Show highlights for May 7th

 Coming up this Saturday May 7th, Your Safe Money Show will be celebrating 10 years on the air! We will look back and share some of the changes over the years. Todd will also explain the Feds Fund Rate and how the Fed sets interest rates. Plus Medicare Part B might reduce premiums, he'll explain. Listen at 8 a.m. at Nice 95.5FM KBEK. They stream live at kbek.com. Hear recent shows at the podcast page at yoursafemoneyshow.com.

10 years of Your Safe Money Show

 We will be celebrating our 10 year Anniversary of Your Safe Money Show this Saturday May 7th. Our first show went on the air May5th of 2012. We'll announce show information tomorrow but there will be some special things for our listeners on Saturday. We sure hope you can listen at Nice 95.5 FM at 8 a.m. or hear the stream at kbek.com.

1095A forms explained

 Even though tax season has settled down I need to mention 1095 A forms. We had so many calls this year especially the last days before the filing ended for taxes. We’d get a call “my tax preparer says I need a 1095 A form to file my taxes, what is that?” The form provides information about your insurance policy, your premiums (the cost you pay for insurance), any advance payment of premium tax credit and the people in your household covered by the policy. MNsure sends the forms to you. So, if you go through MNsure that is Minnesota’s health care exchange. The form is sent in January like other forms you get for tax purposes like 1099’s for example. You’ll want to look for this form in January and there’s a place on your federal tax form that will ask for the information from your 1095 A. I believe many of the calls were from people that didn’t realize what the form was and either didn’t get one or possibly threw it away. We can get that information for our clients but if you’ve set up your plan yourself you have to call MNsure and they will mail you a copy if you’ve lost or misplaced your 1095 A form. I hope that clears things up and we’ll remind you about that in January.

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